DTE Energy 2014 Annual Report Download - page 12

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DTE Gas's business is subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the
costs of regulatory assets, conditions of service, accounting and operating-related matters. DTE Gas's MPSC-approved rates charged to customers have
historically been designed to allow for the recovery of costs, plus an authorized rate of return on our investments. DTE Gas operates natural gas storage and
transportation facilities in Michigan as intrastate facilities regulated by the MPSC and provides intrastate storage and transportation services pursuant to an
MPSC-approved tariff.
DTE Gas also provides interstate storage and transportation services in accordance with an Operating Statement on file with the FERC. The FERC's
jurisdiction is limited and extends to the rates, non-discriminatory requirements, and the terms and conditions applicable to storage and transportation
provided by DTE Gas in interstate markets. FERC granted DTE Gas authority to provide storage and related services in interstate commerce at market-based
rates. DTE Gas provides transportation services in interstate commerce at cost-based rates approved by the MPSC and filed with the FERC.
We are subject to the requirements of other regulatory agencies with respect to safety, the environment and health.
See Notes 8 and 17 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters" and "Commitments and Contingencies".
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Energy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Gas’s ability to control its
uncollectible accounts receivable and collections expenses. DTE Gas’s uncollectible accounts receivable expense is directly affected by the level of
government-funded assistance its qualifying customers receive. We work continuously with the State of Michigan and others to determine whether the share
of funding allocated to our customers is representative of the number of low-income individuals in our service territory. We also partner with federal, state
and local officials to attempt to increase the share of low-income funding allocated to our customers. Changes in the level of funding provided to our low-
income customers will affect the level of uncollectible expense.
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Our strategy is to be the preferred provider of natural gas services in Michigan. We expect future sales volumes to decline due to reduced natural gas
usage by customers due to more efficient furnaces and appliances, and an increased emphasis on conservation of energy usage. We continue to provide
energy-related services that capitalize on our expertise, capabilities and efficient systems. We continue to focus on lowering our operating costs by
improving operating efficiencies.
Competition in the gas business primarily involves other natural gas transportation providers, as well as providers of alternative fuels and energy
sources. The primary focus of competition for end user transportation is cost and reliability. Some large commercial and industrial customers have the ability
to switch to alternative fuel sources such as coal, electricity, oil and steam. If these customers were to choose an alternative fuel source, they would not have a
need for our end-user transportation service. In addition, some of these customers could bypass our pipeline system and have their gas delivered directly from
an interstate pipeline. We compete against alternative fuel sources by providing competitive pricing and reliable service, supported by our storage capacity.
Our extensive transportation pipeline system has enabled us to market our storage and transportation services for gas producers, marketers, distribution
companies, end-user customers and other pipeline companies. We operate in a central geographic location with connections to major Midwestern interstate
pipelines that extend throughout the Midwest, eastern United States and eastern Canada.
DTE Gas’s storage capacity is used to store natural gas for delivery to DTE Gas's customers as well as sold to third parties, under a variety of
arrangements. Prices for storage arrangements for shorter periods are generally higher, but more volatile than for longer periods. Prices are influenced
primarily by market conditions, weather and natural gas pricing.
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